TaxTMI 
TaxTMI 
2014 (10) TMI 119
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....d, dried and powdered. Such processed materials are known as High Protein Poultry Mash (HPPM). (iv) The appellants cleared HPPM, classifying under heading No. 23.01 of the CETA, without payment of duty to Domestic Tariff Area (DTA), claiming the exemption under Notification No. 23/2003-CE dated 31.03.2003 (Sl.No.21). (v) Three show cause notices were issued proposing to classify HPPM under Heading No. 23.02 of CETA, similar to heading 2309.90 of Customs Tariff Act, 1975 (CTA). It has also proposed to demand duty along with interest and penalty for the period from February, 2003 to December, 2003. (vi) The adjudicating authority confirmed the classification under Heading No. 2302.00 of CETA corresponding to heading No. 2309.90 of CTA. It has also confirmed the demand of duty along with interest. (vii) By the impugned order, the Commissioner (Appeals) modified the adjudication order in so far as to re-quantify the demand, after taking into account of the overlapping of the transaction for the month of September, 2003 and cum-duty benefit was extended. (viii) The appellants filed these appeals to the extent of challenging the classification of HPPM under Heading No. 23....
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....ft Products 1995 (77) ELT 23 (S.C.) The Ld. Advocate submits that since their product 'HPPM' does not contain any added material, it is not a preparation of animal feeding and it is rightly classifiable under heading no. 2301 of CETA and eligible of NIL rate of duty under Notification No. 23/2003 (S.No. 21) as Waste. 4. On the other hand, the Ld. AR on behalf of the Revenue reiterated the findings of lower authorities. He submits that conversion of poultry wastes into HPPM would amount to manufacture and during the process, the waste products lose their original identity and a new distinct product ie., HPPM emerges, which is known as 'Poultry feed supplement'. The appellant also mentioned in their invoices as HPPM and cleared to DTA. As per Note of Chapter 23 of CETA, the Heading 23.02, covers not only preparation but also products obtained by processing of vegetable or animal materials to such an extent that they have lost the essential character. He submits that heading 23.09 of CETA contains variety of animal feed supplements under various heads, which does not contain any vitamins and other nutrients. What is relevant for deciding classification is that the (1) process in....
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....feathers, heads, legs, blood and other offals. These waste materials cannot be disposed off anywhere due to pollution hazards. Hence, we are letting these offals into a special process in a plant called rendering plant in order to cook these offals (waste materials) at a high temperature. As a result of this, we are getting a saleable material called 'High Protein Poultry Mash' HPPM. 15. They have also furnished a letter dated 16.06.2004 explaining the process of manufacture of HPPM as follows: While processing the poultry meat, we get wastes like 1.Poultry intestine, 2.feathers, 3.slaughtered heads, 4.slaughtered legs, 5.waste blood etc., All these hazardous waste materials like intestine, feathers, heads, legs from processing hall are take to offal's sump tank through under ground drainages. From offal's sump tank it is pumped up to Bow screen. The collection from the bow screen is segregated as effluent water and offals. Effluent water will be sent to ET plant, offal's will be collected in feather holding bin, from there it is taken through screw conveyer belt to cooker. 16. Waste blood from the p....
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....powdered form 2309 90 39 Other 2309 90 90 Other (c) Chapter 23 of HSN:- Xxx xxx xxx 23.09 Preparations of a kind used in animal feeding 2309.10 Dog or cat food, put up for retail sale 2309.90 Other This heading covers sweetened forage and prepared animal feeding stuffs consisting of a mixture of several nutrients designed: (1) to provide the animal with a rational and balanced daily diet (complete feed); (2) to achieve a suitable daily diet by supplementing the basic farm produced feed with organic or inorganic substances (supplementary feed); or (3) for use in making complete or supplementary feeds. d) Sl. No. 21 of the Table appended to Notification No. 23/2003 CE dated 31.03.2003 as under:- 21 Any chapter Waste from food industries in excess of 'Nil' 10 Condition 10 If the goods are manufactured wholly from indigenous raw materials. 5.4 The Ld. Advocate relied on HSN Explanatory Notes of Heading 2301, which is reproduced as under:- &n....
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....d and other offals etc., arise during the process of manufacture of Processed Chicken Meat. The appellant did not clear the said waste materials as such from their premises. The said waste materials were processed by the appellant as mentioned above. On perusal of processing of waste material as stated above, we find that various waste materials such as intestine, feathers, heads, legs etc. lost the essential characteristics of the original material and a new product was emerged in powder form, used in animal feeding and known as HPPM in the market. So, we do not have any hesitation to hold that as per Chapter note 23 of CETA, the product HPPM as manufactured by the appellant would come under heading No. 23.02 of CETA. 7. Chapter No. 23 of CETA, CTA and HSN is inclusive definition and product to be covered under heading 2309 of HSN is heading 23.02 of CETA should confirm to be used in 3 criteria (i) the product is generally used in animal feeding (ii) these goods should not fall under any other chapters (iii) the product should have been obtained by processing of vegetable of animal material, and (iv) the said resultant product has lost the essential character of the original ma....
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....on are derived merely by the extraction of the mineral parts of the bones. Gelatine is obtained by a further treatment, with an alkali, of the ossein manufactured from the bones. It is the collagen which forms the organic content of the bones and is utilised in the manufacture of ossein and gelatine. The word 'product' is defined in Webster's Comprehensive Dictionary as 'anything produced or obtained as a result of some operation or work'. The expression 'bone products' therefore merely means anything produced or obtained from bones. Whether such derivation is by a simple physical process or by a chemical reaction would seem to make no difference to the end product. Buttermilk, for instance, does not cease to be a milk product merely because a chemical process is involved in the transformation. The ossein and gelatine manufactured by the respondent can, without straining the expression used in the notification, be described as bone products. We are, therefore, in agreement with the view taken by the Tribunal that the products manufactured by the Respondent Company are eligible to the exemption under the Notification dated 30-6-1975. 87. Examining the preparations mentioned under....
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....the appellants described the HPPM in the invoice documents as 'Poultry feed supplement and cleared to DTA. The appellants who are fully aware of the new product and its usage and on their own given a specific name and description as HPPM as 'poultry feed supplement'. It is a distinct product obtained from poultry wastes and it has lost the essential characteristics of poultry wastes such as intestine, heads, legs, feather, blood etc. The appellants described the product as HPPM itself suggest that it is a High Protein Product used as 'Poultry feed supplement'. Further, we find that this HPPM is not elsewhere classifiable in any other chapters of CETA. Therefore, the product HPPM is fully satisfies the description given under chapter note of heading 23 of CTA and chapter note of chapter 23 of CETA. Therefore, the product cannot be classifiable under Ch. 2301 of CETA, as a waste as claimed by the appellants. The product of a kind used in animal feeding cannot be covered under Ch. 2301 of CETA. By virtue of chapter note of chapter 23 of CETA read with Explanatory Note to sub-heading 2309 of HSN, we are of the considered view that the product HPPM is rightly classifiable under Ch. 230....